Rajasthan High Court
M/S National Engineers vs M/S Batliboi Ltd on 9 March, 2021
Bench: Indrajit Mahanty
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Arbitration Application No. 41/2017
M/s National Engineers Having Its Registered Office At A-26/d,
Bhartiya Path, Kanti Chandra Road, Bani Park, Jaipur, Rajasthan
302016 Through Proprietor Smt. Saroj Agarwal.
----Petitioner
Versus
M/s Batliboi Limited Having Its Corporate Office At Bharat House
5Th Floor, 104, Bombay Samachar Marg, Fort, Mumbai 400001
Also At Saraf House, P.o. Box No. 186, Opp. A.i.r. Mirza Ismail
Road, Jaipur 302001.
----Respondent
For Petitioner(s) : Mr. Gunjan Pathak
For Respondent(s) : Mr. Rajendra Prasad, Sr. Adv. assisted
by Mr. Rishabh Khandelwal
HON'BLE THE CHIEF JUSTICE
Order
09/03/2021
1. Heard learned counsel for the respective parties.
2. The applicant has moved an application seeking appointment
of an arbitrator under Section 11 of the Arbitration and
Conciliation Act, 1996 (hereinafter to be referred as the 'Act of
1996'), claiming therein that certain disputes have arisen pursuant
to an order placed by respondent vide Annexure-1 dated
13.07.1995.
3. It is submitted on behalf of the applicant that pursuant to the
said order, the petitioner-applicant paid a sum of Rs.2,25,000/- by
cheque as 25% advance for supply of Solitaire Center Less
Grinding Machine and balance payment of Rs.7,35,000/- was
made on 21.03.1996 under Annexure-6. The respondents have
(2 of 4) [ARBAP-41/2017]
acknowledged the receipt of balance amount of Rs. 7,35,000/-. In
this manner, it is submitted on behalf of the applicant that
although the entire consideration for purchase of Solitaire Center
Less Grinding Machine Model-OMV-8" was placed on the
respondent and the entire consideration was paid, the respondent
did not supply the machine nor have refunded the money to the
applicant. Learned counsel for the applicant also placed reliance
on Clause VII of Annexure-6 (invoice) given by the respondent
which contains the following Arbitration Clause:-
"VII. ARBITRATION:
Any dispute whatsoever touching or arising out of
the contract including any dispute arising out of
resale, shall unless amicably settled be referred
to arbitration in Jaipur by two persons residing in
Jaipur one to be appointed by each party and the
two arbitrators shall nominate or umpire residing
at Jaipur before proceeding with the arbitration &
the arbitration shall be in accordance with the law
for the time being governing arbitrations in India.
The arbitrators or umpire shall be entitled from
time to time extend the time for giving the award
with the written consent of the parties. Civil court
of Competent Jurisdiction in Jaipur alone shall
have jurisdiction."
4. Learned counsel appearing for respondent on the other hand
submitted that the present application under Section 11 ought to
be rejected on the ground that it is barred by limitation. It is
further submitted that the alleged clause of arbitration relied upon
by the applicant is not applicable in the present case because the
contract was concluded independent of the invoice issued under
the agreement. It is further submitted that invoice has not been
signed by both parties and it cannot form part of the agreement.
Learned counsel appearing for the respondent also placed reliance
on a judgment of the Hon'ble Supreme Court in the case of Vidya
Drolia & Ors. Vs. Durga Trading Corporation (Civil Appeal
(3 of 4) [ARBAP-41/2017]
No.2402/2019) and submitted that it is the obligation of the
Court before whom the issue of appointment of an arbitrator
arises to consider at the outset whether the claim itself being
raised is barred by limitation or not. Relevant paragraph 93 of the
aforesaid judgment reads as under:-
"93. Section 43(1) of the Arbitration Act states
that the Limitation Act, 1963 shall apply to
arbitrations as it applies to court proceedings. Sub-
section (2) states that for the purposes of the
Arbitration Act and Limitation Act, arbitration shall
be deemed to have commenced on the date
referred to in Section
21. Limitation law is procedural and normally
disputes, being factual, would be for the arbitrator
to decide guided by the facts found and the law
applicable. The court at the referral stage can
interfere only when it is manifest that the claims
are ex facie time barred and dead, or there is no
subsisting dispute. All other cases should be
referred to the arbitral tribunal for decision on
merits. Similar would be the position in case of
disputed 'no claim certificate' or defence on the
plea of novation and 'accord and satisfaction'. As
observed in Premium Nafta Products Ltd., it is not
to be expected that commercial men while
entering transactions inter se would knowingly
create a system which would require that the court
should first decide whether the contract should be
rectified or avoided or rescinded, as the case may
be, and then if the contract is held to be valid, it
would require the arbitrator to resolve the issues
that have arisen."
5. Upon query by this Court from the respondent that if there
has been any termination of the agreement entered into between
the parties, respondent's counsel answered in negative.
Consequently, there is no doubt that the dispute still subsists.
6. After hearing the submissions of learned counsel for the
respective parties and perusing the documents appended to the
present case, this Court is of the considered view that the issue of
(4 of 4) [ARBAP-41/2017]
arbitrability, including limitation which is a mixed question of facts
and law is best left to be adjudicated by the Arbitrator.
7. Consequently, I express no opinion on merits of the case of
either side on the issue involved as well as law itself and hereby
appoints Shri N.K. Purohit, District Judge (Retd.), C-116, Savitri
Path, Bapu Nagar, Jaipur as an Arbitrator to decide the issue. The
arbitration fees shall be in accordance with Fourth Schedule of the
Act of 1996.
8. It shall be open to the parties to raise all such objections
before the Arbitrator. It is made clear that nothing stated in the
order shall prejudice either side.
9. Registry is directed to intimate Shri N.K. Purohit, District
Judge (Retd.) of his appointment as Arbitrator and parties are at
liberty to call upon reliable date for necessary directions.
10. The application is accordingly allowed.
(INDRAJIT MAHANTY),CJ
N.Gandhi/Harshit/8
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